Cisco's product transitions hitting router share

Lost 5% in 2013 as customers mull migration to CRS-X, NCS

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Perhaps an indication of the tricky product transition it's going through, Cisco's share of the service provider router market slipped 5% in 2013 while Alcatel-Lucent and Juniper gained. Cisco's share slipped from 49% in Q1 to 44% in Q4 of 2013, according to Synergy Research Group.

Alcatel-Lucent ended the year with 18% share while Juniper finished with 17% of the $12.7 billion market in 2013. Both companies grew greater than the overall market, with Juniper's revenue climbing 13%.

Cisco's undergoing a nettlesome product transition in core routing as customers size up both the CRS-X and Network Convergence System platforms. Existing CRS-3 users are pausing as they contemplate these upgrades and it's hitting router revenue and orders, which were down 11% and 5%, respectively, in Q2.

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Meanwhile, total service provider router revenues grew by 1.4% to $3.2 billion in the fourth quarter of 2013, according to Synergy. Core routers accounted for 19% of Q4 revenues, while edge routers accounted for 62% and Ethernet access-aggregation devices 19%.

North America remained the biggest region, accounting for 36% of worldwide revenues, while EMEA realized the biggest growth and reached record levels.

Synergy expects Network Functions Virtualization (NFV), the emerging service provider trend of replacing dedicated hardware appliances for load balancing, firewalling, WAN optimization and deep packet inspection with software on x86 servers, to introduce further market share shifts next year.

"The recent announcements around NFV point to likely further changes in 2014," said Jeremy Duke, Synergy Research Group's founder and chief analyst. "NFV should bring dramatic benefits to the worlds of mobile, video, and cloud, but it will be a question of how quickly operators embrace NFV throughout their networks and which vendors best position themselves to gain share from this transition."

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